Both lower courts determined the fee is constitutional and did not require a public vote.

The Supreme Court’s decision comes after the Colorado Union of Taxpayers, a conservative nonprofit, sued the city and its elected officials in August 2012 on the argument that Aspen City Council had passed a sin tax, when, in fact, voters should have decided.

The council passed the ordinance in 2011 dropping the use of plastic grocery bags and requiring shoppers to pay 20 cents for use of a paper bag supplied by Aspen’s two grocers, City Market and Clark’s Market.

The City Council reasoned at the time of the ordinance’s passage that the charge would discourage consumers from using paper bags in order to reduce waste, while encouraging them to take reusable bags with them while shopping for groceries.

The Supreme Court’s 19-page majority order upholding the Court of Appeals’ decision noted that unlike a tax, the fee was not implemented to raise revenue for the government. Proceeds from the fee, the high court noted, cover expenses associated with providing reusable bags to residents and visitors, as well as funding outreach programs to educate the public on waste and recycling.

“Because the stated purpose of the ordinance is to protect the health, safety, and welfare of citizens and visitors of Aspen, and because Aspen labeled the charge a fee, we conclude that the ordinance does not facially purport to levy a tax,” the opinion said.

Additionally, the ruling stated that the 20-cent charge was appropriate because that is what it costs the city to recycle a paper bag.

“Nothing in the record suggests that Aspen used biased or unscientific information in setting the charge at $0.20 per bag, and we perceive no infirmity in Aspen’s methodology to determine the price of the charge,” the ruling said. “Moreover, it was undisputed at the trial court that Aspen set the charge at $0.20 because it believed this was the amount it cost the city to recycle a bag.”

In its conclusion the high court left no question to whether the charge is a fee or a tax.

“Aspen’s bag charge is not a tax of any kind. Instead of raising revenue with this ordinance, Aspen sought to regulate the use of plastic and paper bags as part of its waste management efforts. It did so by banning the use of plastic bags entirely and imposing a reasonable charge only on persons given a paper bag.”

Two dissenting opinions were offered by the Supreme Court.

“In all meaningful respects, Aspen’s ‘waste reduction fee’ is in the nature of, and functions entirely as, a ‘sin tax,'” said one of the dissenting opinions.

Another dissenting opinion concluded, “Here, Aspen’s bag ordinance, which overtly seeks to heap benefits on the entire Aspen community, is a tax. Tempting though it may be to provide a reprieve to local governments seemingly hamstrung at times by the strictures of TABOR, that policy decision is not ours to make. Because the bag charge is a tax, the voter approval requirement of TABOR applies.”